EXHIBIT H (IV)
January 08, 2004
USAA Mutual Fund, Inc.,
USAA Investment Trust,
USAA Tax Exempt Fund, Inc.,
USAA State Tax-Free Trust, and
USAA Life Investment Trust, not in their individual capacities but on behalf
of and for the benefit of the series of funds comprising each such
Borrower as set forth on SCHEDULE A hereto
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Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Ladies and Gentlemen:
This Facility Agreement Letter (this "AGREEMENT") sets forth the terms
and conditions for loans (each a "LOAN" and collectively the "LOANS") which USAA
Capital Corporation ("CAPCO"), agrees to make during the period commencing
January 08, 2004 and ending January 06, 2005 (the "FACILITY PERIOD") to USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust, and each investment company which
may become a party hereto pursuant to the terms of this Agreement (each a
"BORROWER" and collectively the "BORROWERS"), each of which is executing this
Agreement not in its individual capacity, but on behalf of and for the benefit
of the series of funds comprising each such Borrower as set forth on SCHEDULE A
(as hereafter modified or amended in accordance with the terms hereof) (each a
"FUND" and collectively the "FUNDS"), under a master revolving credit facility
(the "FACILITY"). This Agreement replaces in its entirety that certain Facility
Agreement Letter dated January 9, 2003, as heretofore amended or modified,
between the Borrowers and CAPCO. CAPCO and the Borrowers hereby agree as
follows:
1. AMOUNT. The aggregate principal amount of the Loans to be advanced
under this Facility shall not exceed, at any one time outstanding, U.S.
$400,000,000 (the "COMMITMENT"). The aggregate principal amount of the Loans
which may be borrowed by a Borrower for the benefit of a particular Fund under
the Facility and the Other Facility (defined below) shall not exceed the
percentage (the "BORROWING LIMIT") of the total assets of such Fund as set forth
on SCHEDULE A.
2. PURPOSE AND LIMITATIONS ON BORROWINGS. Each Borrower will use the
proceeds of each Loan made to it solely for temporary or emergency purposes of
the Fund for whose benefit it is borrowing in accordance with such Fund's
Borrowing Limit and prospectus in effect at the time of such Loan. Portfolio
securities may not be purchased by a Fund while there is a Loan outstanding
under the Facility and/or a loan outstanding under the Other Facility (defined
below) for the benefit of such Fund, if the aggregate amount of such Loan and
such other loan under the Other Facility exceeds 5% of the total assets of such
Fund. The Borrowers will not, and will not permit any Fund to, directly or
indirectly, use any proceeds of any Loan for any purpose, that would violate any
provision of any applicable statute, regulation, order, or restriction.
3. BORROWING RATE AND MATURITY OF LOANS. CAPCO shall make Loans to a
Borrower and the principal amount of each Loan outstanding from time to time
shall bear interest from the date each such Loan is made to, but excluding the
date of payment in full thereof, at a rate per annum equal to the rate at which
CAPCO obtains funding in the capital markets. Interest on the Loans shall be
calculated on the basis of a year of 360 days and the actual days elapsed but
shall not exceed the highest lawful rate. Each loan will be for an established
number of days agreed upon by the applicable Borrower and CAPCO on or before the
date of such Loan. Notwithstanding the above, all Loans to a Borrower shall be
made
available at a rate per annum equal to the rate at which CAPCO would make loans
to affiliates and subsidiaries. Further, as to the investment companies except
USAA Life Investment Trust, if the CAPCO rate exceeds the rate at which a
Borrower could obtain funds pursuant to the $100 million credit agreement with
State Street Bank and Trust Company ("State Street") and Bank of America, N.A.
("Bank of America") , the Borrower will in the absence of predominating
circumstances, borrow from State Street and/or Bank of America. Any past due
principal and/or accrued interest shall bear interest at a rate per annum equal
to the aggregate of the "FEDERAL FUNDS RATE" plus 1.50 percent (150 basis
points), but not to exceed the highest lawful rate, from the date of any such
payment was due, but excluding the date of payment in full thereof, and shall be
payable on demand.
4. ADVANCES, PAYMENTS, PREPAYMENTS AND READVANCES. Upon each Borrower's
request, and SUBJECT TO the terms and conditions contained herein, CAPCO shall
make Loans to each Borrower on behalf of and for the benefit of its respective
Fund(s) during the Facility Period, and each Borrower may borrow, repay and
reborrow Loans hereunder. The Loans shall be evidenced by a duly executed and
delivered Master Grid Promissory Note in the form of EXHIBIT A (the "NOTE").
Each Loan shall be in an aggregate amount not less than U.S. $100,000 and
increments of U.S. $1,000 in excess thereof. Payment of principal and interest
due with respect to each Loan shall be payable at the maturity of such Loan and
shall be made in funds immediately available to CAPCO prior to 2:00 p.m. San
Antonio, Texas time on the day such payment is due, or as CAPCO shall otherwise
direct from time to time and, SUBJECT TO the terms and conditions hereof, may be
repaid with the proceeds of a new borrowing hereunder. Notwithstanding any
provision of this Agreement to the contrary, all Loans, accrued but unpaid
interest and other amounts payable hereunder shall be due and payable upon
termination of the Facility (whether by acceleration or otherwise).
5. FACILITY FEE. Beginning with the date of this Agreement and until
such time as all Loans have been irrevocably repaid to CAPCO in full, and CAPCO
is no longer obligated to make Loans, each Fund (to be allocated among the Funds
as the Borrowers deem appropriate) severally shall pay to CAPCO its allocated
share of a facility fee (the "FACILITY FEE"). The Facility Fee will be the
Borrowers' assessed proportionate share of CAPCO's operating expenses related to
obtaining/maintaining CAPCO's funding programs. The expense will be allocated by
CAPCO to the Borrowers and to the other CAPCO borrowers (CAPCO affiliates and
subsidiaries) based on the Borrowers' Commitment (as it may be reduced pursuant
to SECTION 6) as a percentage of the total amount of borrowing authorized for
all CAPCO borrowers. In no event will the Facility Fee exceed .09 of one percent
(9 basis points) of the amount of the commitment, nor will it exceed the fee
charged any other CAPCO affiliates and subsidiaries under similar loan
arrangements.
6. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENT. The Borrowers on
behalf of the applicable Funds shall have the right upon at least three business
days prior written notice to CAPCO, to terminate or reduce the unused portion of
the Commitment. Any such reduction of the Commitment shall be in the amount of
U.S. $5,000,000 or any larger integral multiple of U.S. $1,000,000 (EXCEPT that
any reduction may be in the aggregate amount of the unused Commitment). Accrued
fees with respect to the terminated Commitment shall be payable to CAPCO on the
effective date of such termination.
7. MANDATORY TERMINATION COMMITMENT. The Commitment shall automatically
terminate on the last day of the Facility Period and any Loans then outstanding
(TOGETHER WITH accrued interest thereon and any other amounts owing hereunder)
shall be due and payable on such date.
8. COMMITTED FACILITY. CAPCO acknowledges that the Facility is a
committed facility and that CAPCO shall be obligated to make any Loan requested
during the Facility Period under this Agreement, subject to the terms and
conditions hereof; PROVIDED, HOWEVER, that CAPCO shall not be obligated to make
any Loan if this Facility has been terminated by the Borrowers, or to a Borrower
on behalf of a proposed borrowing Fund, if at the time of a request for a Loan
by a Borrower (on behalf of such applicable borrowing Fund) there exists any
Event of Default or condition which, with the passage of time or giving of
notice, or both, would constitute or become an Event of Default with respect to
such Fund.
9. LOAN REQUESTS. Each request for a Loan (each a "BORROWING NOTICE")
shall be in writing by the applicable Borrower, EXCEPT that such Borrower may
make an oral request (each an "ORAL REQUEST") PROVIDED THAT each Oral Request
shall be followed by a written Borrowing Notice within one business day. Each
Borrowing Notice shall specify the following terms ("TERMS") of the requested
Loan: (i) the date on which such Loan is to be disbursed, (ii) the principal
amount of such Loan, (iii) the Borrower which is borrowing such Loan, (iv) the
Fund(s) for whose benefit the Loan is being borrowed and the amount of the Loan
which is for the benefit of each such Fund, and (v) the requested maturity date
of the Loan. Each Borrowing Notice shall also set forth the total assets of each
Fund for whose benefit a portion of the Loan is being borrowed as of the close
of business on the day immediately preceding the date of such Borrowing Notice.
Borrowing notices shall be delivered to CAPCO by 9:00 a.m. San Antonio, Texas
time on the day the Loan is requested to be made.
Each Borrowing Notice shall constitute a representation to CAPCO by the
applicable Borrower on behalf of the proposed borrowing Fund(s) of such Borrower
that all of the representations and warranties made by such Borrower on behalf
of the applicable borrowing Fund(s) of such Borrower in SECTION 12 are true and
correct as of such date and that no Event of Default or other condition which
with the passage of time or giving of notice, or both, would result in an Event
of Default, has occurred or is occurring with respect to such borrowing Fund(s).
10. CONFIRMATIONS; CREDITING OF FUNDS; RELIANCE BY CAPCO. Upon receipt
by CAPCO of a Borrowing Notice:
(a) CAPCO shall send the applicable Borrower written
confirmation of the Terms of such Loan via facsimile or telecopy, as soon as
reasonably practicable; PROVIDED, HOWEVER, that the failure to do so shall not
affect the obligation of such Borrower;
(b) CAPCO shall make such Loan in accordance with the Terms by
transfer of the Loan amount in immediately available funds, to the account of
the applicable Borrower as specified in EXHIBIT B or as such Borrower shall
otherwise specify to CAPCO in a writing signed by an Authorized Individual (as
defined in SECTION 11) of such Borrower and sent to CAPCO via facsimile or
telecopy; and
(c) CAPCO shall make appropriate entries on the Note or the
records of CAPCO to reflect the Terms of the Loan; PROVIDED, HOWEVER, that the
failure to do so shall not affect the obligation of any borrowing Fund.
CAPCO shall be entitled to rely upon and act hereunder pursuant to any Oral
Request, which it reasonably believes to have been made by the applicable
Borrower through an Authorized Individual. If any Borrower believes that the
confirmation relating to any Loan contains any error or discrepancy from the
applicable Oral Request, such Borrower will promptly notify CAPCO thereof.
11. BORROWING RESOLUTIONS AND OFFICERS' CERTIFICATES. Prior to the
making of any Loan pursuant to this Agreement, the Borrowers shall have
delivered to CAPCO (a) the duly executed Note, (b) resolutions of each
Borrower's Board of Directors/Trustees authorizing each Borrower to execute,
deliver and perform this Agreement and the Note on behalf of the applicable
Funds, (c) an Officer's Certificate in substantially the form set forth in
EXHIBIT D, authorizing certain individuals ("AUTHORIZED INDIVIDUALS"), to take
on behalf of each Borrower (on behalf of the applicable Funds) actions
contemplated by this Agreement and the Note, and (d) the opinion of counsel to
USAA Investment Management Company, manager and advisor to the Borrowers, with
respect to such matters as CAPCO may reasonably request.
12. REPRESENTATIONS AND WARRANTIES. In order to induce CAPCO to enter
into this Agreement and to make the Loans provided for hereunder, each Borrower
hereby severally, makes on behalf of each
of its respective series of Funds comprising such Borrower the following
representations and warranties, which shall survive the execution and delivery
hereof and of the Note:
(a) ORGANIZATION, STANDING, ETC. Such Borrower is a
corporation or trust duly organized, validly existing, and in good standing
under applicable state laws and has all requisite corporate or trust power and
authority to carry on its respective businesses as now conducted and proposed to
be conducted, to enter into this Agreement and all other documents to be
executed by it in connection with the transactions contemplated hereby, to issue
and borrow under the Note and to carry out the terms hereof and thereof;
(b) FINANCIAL INFORMATION; DISCLOSURE, ETC. Such Borrower has
furnished CAPCO with certain financial statements of such Borrower with respect
to itself and the applicable Fund(s), all of which such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis and fairly present the financial position and
results of operations of such Borrower and the applicable Funds on the dates and
for the periods indicated. Neither this Agreement nor any financial statements,
reports or other documents or certificates furnished to CAPCO by such Borrower
on behalf of the applicable Fund(s) in connection with the transactions
contemplated hereby contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements contained herein or
therein in light of the circumstances when made not misleading;
(c) AUTHORIZATION; COMPLIANCE WITH OTHER INSTRUMENTS. The
execution, delivery and performance of this Agreement and the Note, and
borrowings hereunder, have been duly authorized by all necessary corporate or
trust action of such Borrower and will not result in any violation of or be in
conflict with or constitute a default under any term of the charter, by-laws or
trust agreement, as applicable, of such Borrower or of any borrowing
restrictions or prospectus or statement of additional information of such
Borrower or the applicable Fund(s), or of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Borrower on behalf of the applicable Fund(s), or result in the creation of any
mortgage, lien, charge or encumbrance upon any of the properties or assets of
the applicable Fund(s) pursuant to any such term. Such Borrower is not in
violation of any term of its respective charter, by-laws or trust agreement, as
applicable, and such Borrower and the applicable Fund(s) are not in violation of
any material term of any agreement or instrument to which they are a party, or
to the best of such Borrower's knowledge, of any judgment, decree, order,
statute, rule or governmental regulation applicable to them;
(d) SEC COMPLIANCE. Such Borrower and the applicable Fund(s)
are in compliance in all material respects with all federal and state securities
or similar laws and regulations, including all material rules, regulations and
administrative orders of the Securities and Exchange Commission (the "SEC") and
applicable Blue Sky authorities. Such Borrower and the applicable Fund(s) are in
compliance in all material respects with all of the provisions of the Investment
Company Act of 1940, and such Borrower has filed all reports with the SEC that
are required of it or the applicable Fund(s);
(e) LITIGATION. There is no action, suit or proceeding pending
or, to the best of each Borrower's knowledge, threatened against such Borrower
or the applicable Fund(s) in any court or before any arbitrator or governmental
body which seeks to restrain any of the transactions contemplated by this
Agreement or which could reasonably be expected to have a material adverse
effect on the assets or business operations of such Borrower or the applicable
Fund(s) or the ability of such applicable Fund(s) to pay and perform their
respective obligations hereunder and under the Notes; and
(f) FUNDS' OBLIGATION FOR REPAYMENT. The assets of each Fund
for whose benefit Loans are borrowed by the applicable Borrower are SUBJECT TO
and liable for such Loans. CAPCO may only seek repayment from the assets of the
Fund of a Borrower that obtained a Loan, and may not seek repayment of that Loan
from the assets of any other Fund of that Borrower.
13. AFFIRMATIVE COVENANTS OF THE BORROWERS. Until such time as all
amounts of principal, interest and other sums due to CAPCO by a Borrower
pursuant to any Loan made to such Borrower for the benefit of the applicable
Fund(s) is irrevocably paid in full, and until CAPCO is no longer obligated to
make Loans to such Borrower for the benefit of the applicable Fund(s), such
Borrower (on behalf of its respective Fund(s)) severally agrees:
(a) To deliver to CAPCO as soon as possible and in any event
within seventy-five (75) days after the end of each fiscal year of such Borrower
and the applicable Fund(s), Statements of Assets and Liabilities, Statements of
Operations and Statements of Changes in Net Assets of each applicable Fund for
such fiscal year, as set forth in each applicable Fund's Annual Report to
shareholders TOGETHER WITH a calculation of the maximum amount which each
applicable Fund could borrow under its Borrowing Limit as of the end of such
fiscal year;
(b) To deliver to CAPCO as soon as available and in any event
within seventy-five (75) days after the end of each semiannual period of such
Borrower and the applicable Fund(s), Statements of Assets and Liabilities,
Statement of Operations and Statements of Changes in Net Assets of each
applicable Fund as of the end of such semiannual period, as set forth in each
applicable Fund's Semiannual Report to shareholders, TOGETHER WITH a calculation
of the maximum amount which each applicable Fund could borrow under its
Borrowing Limit at the end of such semiannual period;
(c) To deliver to CAPCO prompt notice of the occurrence of any
event or condition which constitutes, or is likely to result in, a change in
such Borrower or any applicable Fund which could reasonably be expected to
materially adversely affect the ability of any applicable Fund to promptly repay
outstanding Loans made for its benefit or the ability of such Borrower or the
applicable Fund(s) to perform their respective obligations under this Agreement
or the Note;
(d) To do, or cause to be done, all things necessary to
preserve and keep in full force and effect the corporate or trust existence of
such Borrower and all permits, rights and privileges necessary for the conduct
of its businesses and to comply in all material respects with all applicable
laws, regulations and orders, including without limitation, all rules and
regulations promulgated by the SEC;
(e) To promptly notify CAPCO of any litigation, threatened
legal proceeding or investigation by a governmental authority which could
reasonably be expected to materially affect the ability of any applicable Fund
to promptly repay the outstanding Loans made for its benefit hereunder or the
ability of such Borrower or the applicable Fund(s) to otherwise perform their
respective obligations hereunder;
(f) In the event a Loan for the benefit of a particular Fund
is not repaid in full within 10 days after the date it is borrowed, and until
such Loan is repaid in full, to deliver to CAPCO, within two business days after
each Friday occurring after such 10th day, a statement setting forth the total
assets of such Fund as of the close of business on each such Friday; and
(g) Upon the request of CAPCO, which may be made by CAPCO from
time to time in the event CAPCO in good faith believes that there has been a
material adverse change in the capital markets generally, to deliver to CAPCO,
within two business days after any such request, a statement setting forth the
total assets of each Fund for whose benefit a Loan is outstanding on the date of
such request.
14. NEGATIVE COVENANTS OF THE BORROWERS. Until such time as all amounts
of principal, interest and other sums due to CAPCO by a Borrower pursuant to any
Loan made to such Borrower for the benefit of the applicable Fund(s) is
irrevocably paid in full, and until CAPCO is no longer obligated to make Loans
to such Borrower for the benefit of the applicable Fund, such Borrower (on
behalf of its respective Fund(s)) severally agrees:
(a) Unless CAPCO has breached its obligations to lend
hereunder or becomes insolvent or the subject of a receivership proceeding, not
to incur any indebtedness for borrowed money (OTHER THAN (i) pursuant to a U.S.
$100,000,000 Credit Agreement with State Street and Bank of America previously
referenced in Paragraph 3 above (the "OTHER FACILITY") and (ii) overdrafts
incurred at the custodian of the Funds from time to time in the ordinary course
of business) EXCEPT the Loans, without the prior written consent of CAPCO, which
consent will not be unreasonably withheld; and
(b) Not to dissolve or terminate its existence, or merge or
consolidate with any other person or entity, or sell all or substantially all of
its assets in a single transaction or series of related transactions (OTHER THAN
assets consisting of margin stock), each without the prior written consent of
CAPCO, which consent will not be unreasonably withheld; PROVIDED THAT a Borrower
or Fund may without such consent merge, consolidate with, or purchase
substantially all of the assets of, or sell substantially all of its assets to,
an affiliated investment company or series thereof, as provided for in Rule
17a-8 under the Investment Company Act of 1940.
15. EVENTS OF DEFAULT. If any of the following events (each an "EVENT
OF DEFAULT") shall occur (it being understood that an Event of Default with
respect to one Fund shall not constitute an Event of Default with respect to any
other Fund):
(a) A Fund shall default in the payment of principal or
interest on any Loan or any other fee due hereunder for a period of five days
after the same becomes due and payable, whether at maturity or, with respect to
any Facility Fee, at a date fixed for the payment thereof;
(b) A Fund shall default in the performance of or compliance
with any term contained in SECTION 13 and such default shall not have been
remedied within 30 days after written notice thereof shall have been given to
the applicable Borrower on behalf of such Fund by CAPCO;
(c) A Fund shall default in the performance of or compliance
with any term contained in SECTION 14;
(d) A Fund shall default in the performance of or compliance
with any other term contained herein and such default shall not have been
remedied within 30 days after written notice thereof shall have been given to
the applicable Borrower on behalf of such Fund by CAPCO;
(e) Any representation or warranty made by or on behalf of a
Fund herein or pursuant hereto shall prove to have been false or incorrect in
any material respect when made;
(f) USAA Investment Management Company or any successor
manager or investment adviser (PROVIDED THAT such successor manager or
investment advisor is a wholly-owned subsidiary of United Services Automobile
Association and/or CAPCO) shall cease to be the manager and investment advisor
of a Fund; PROVIDED THAT USAA Investment Management Company (or its successor)
shall be permitted to hire one or more of the existing subadvisers listed on
SCHEDULE B as subadvisers for any Fund and may add new subadvisers as provided
in SECTION 16(B); or
(g) An event of default shall occur and be continuing under
the Other Facility with respect to a Fund;
then, in any event, and at any time thereafter, if any Event of Default shall be
continuing, CAPCO may by written notice to the applicable Borrower (i) terminate
its commitment to make any Loan hereunder to such Borrower with respect to such
Fund, whereupon said commitment shall forthwith terminate without any other
notice of any kind and (ii) declare the principal and interest in respect of any
outstanding Loans with respect to such Fund, and all other amounts due hereunder
with respect to such Fund, to be immediately due and payable whereupon the
principal and interest in respect thereof and all other amounts due hereunder
shall become forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived by the Borrowers on
behalf of the applicable Funds.
16. NEW BORROWERS; NEW FUNDS; NEW SUBADVISERS
(a) So long as no Event of Default or condition which, with
the passage of time or the giving of notice, or both, would constitute
or become an Event of Default has occurred and is continuing, and with
the prior consent of CAPCO, which consent will not be unreasonably
withheld:
(i) Any investment company that becomes part of the
same "GROUP OF INVESTMENT COMPANIES" (as that term is defined in Rule
11a-3 under the Investment Company Act of 1940) as the original
Borrowers to this Agreement, may, by submitting an amended SCHEDULE A
and EXHIBIT B to this Agreement to CAPCO (which amended SCHEDULE A and
EXHIBIT B shall replace SCHEDULE A and EXHIBIT B which are then a part
of this Agreement) and such other documents as CAPCO may reasonably
request, become a party to this Agreement and may become a "BORROWER"
hereunder; and
(ii) A Borrower may, by submitting an amended
SCHEDULE A and EXHIBIT B to this Agreement to CAPCO (which amended
SCHEDULE A and EXHIBIT B shall replace SCHEDULE A and EXHIBIT B which
are then a part of this Agreement), add additional Funds for whose
benefit such Borrower may borrow Loans. No such amendment of SCHEDULE A
to this Agreement shall amend the Borrowing Limit applicable to any
Fund without the prior consent of CAPCO.
(b) A Borrower may, by submitting an amended SCHEDULE B to
this Agreement to CAPCO (which amended SCHEDULE B shall replace the
SCHEDULE B which is then a part of this Agreement), add new
subadvisers, which are not currently subadvising any other Fund.
17. LIMITED RECOURSE. CAPCO agrees (a) that any claim, liability, or
obligation arising hereunder or under the Note whether on account of the
principal of any Loan, interest thereon, or any other amount due hereunder or
thereunder shall be satisfied only from the assets of the specific Fund for
whose benefit a Loan is borrowed and in any event in an amount not to exceed the
outstanding principal amount of any Loan borrowed for such Fund's benefit,
TOGETHER WITH accrued and unpaid interest due and owing thereon, and such Fund's
share of any other amount due hereunder and under the Note (as determined in
accordance with the provisions hereof) and (b) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Note with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Note (as determined in accordance with the provisions
hereof).
18. REMEDIES ON DEFAULT. In case any one or more Events of Default
shall occur and be continuing, CAPCO may proceed to protect and enforce its
rights by an action at law, suit in equity or other appropriate proceedings,
against the applicable Borrower on behalf of the applicable defaulting Fund(s),
as the case may be. In the case of a default in the payment of any principal or
interest on any Loan or in the payment of any fee due hereunder, the relevant
Fund(s) (to be allocated among such Funds as the Borrowers deem appropriate)
severally shall pay to CAPCO such further amount as shall be sufficient to cover
the cost and expense of collection, including, without limitation, reasonable
attorney's fees and expenses from the relevant Fund.
19. NO WAIVER OF REMEDIES. No course of dealing or failure or delay on
the part of CAPCO in exercising any right or remedy hereunder or under the Note
shall constitute a waiver of any right or remedy hereunder or under the Note,
nor shall any partial exercise of any right or remedy hereunder or under the
Note preclude any further exercise thereof or the exercise of any other right or
remedy hereunder or under the Note. Such rights and remedies expressly provided
are cumulative and
not exclusive of any rights or remedies which CAPCO would otherwise have.
20. EXPENSES. Each of the Funds severally shall pay on demand all
reasonable out-of-pocket costs and expenses (including reasonable attorney's
fees and expenses) incurred by CAPCO in connection with the collection and any
other enforcement proceedings of or regarding this Agreement, any Loan or the
Note against such Fund.
21. BENEFIT OF AGREEMENT. This Agreement and the Note shall be binding
upon and inure for the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; PROVIDED THAT no party to this
Agreement or the Note may assign any of its rights hereunder or thereunder
without the prior written consent of the other parties.
22. NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES
(A) GENERAL. Unless otherwise expressly provided herein, all notices,
requests and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed, or delivered to the applicable address or facsimile number, or (subject
to SUBSECTION (C) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:
(i) if to the Borrowers, to the address, facsimile number,
electronic mail address, or telephone number specified for such Person
on EXHIBIT B or to such other address, facsimile number, electronic
mail address, or telephone number as shall be designated by such party
in a notice to the other parties; and
(ii) if to CAPCO, to the address, facsimile number, electronic
mail address, or telephone number specified on EXHIBIT C or to such
other address, facsimile number, electronic mail address, or telephone
number as shall be designated by such party in a notice to the other
parties.
All such notices and other communications shall be deemed to be given or made
upon the EARLIER to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by certified mail, when signed for
by or on behalf of the relevant party hereto; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
SUBSECTION (C) below), when delivered. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.
(b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. This Agreement
and all other documents to be executed by it in connection with the transactions
contemplated hereby may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to applicable
law, have the same force and effect as manually-signed originals and shall be
binding on all Borrowers and the Bank. The Bank may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
PROVIDED HOWEVER, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.
(c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
drafts of loan documents and financial statements and other information as
provided in Section 13, and to distribute this Agreement and the other documents
to be executed in connection herewith for execution by the parties thereto, and
may not be used for any other purpose.
23. MODIFICATIONS. No provision of this Agreement or the Note may be
waived, modified or discharged EXCEPT by mutual written agreement of all
parties. THIS WRITTEN LOAN AGREEMENT AND THE NOTE REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE
PARTIES.
24. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the state of Texas without regard
to the choice of law provisions thereof. Chapter 346 of the Texas Finance Code
shall not apply to this Agreement or the Loans made hereunder.
25. TRUST DISCLAIMER. Neither the shareholders, trustees, officers,
employees and other agents of any Borrower or Fund shall be personally bound by
or liable for any indebtedness, liability or obligation hereunder or under the
Note nor shall resort be had to their private property for the satisfaction of
any obligation or claim hereunder.
26. PUBLICITY. Neither CAPCO nor the Borrowers will use any name,
trademark, or trade name of the other without that other party's prior written
consent.
If this letter correctly reflects your agreement with us, please execute both
copies hereof and return one to us, whereupon this Agreement shall be binding
upon the Borrowers (not in their individual capacity, but on behalf of their
respective Funds listed on SCHEDULE A hereto) and CAPCO.
Sincerely,
USAA CAPITAL CORPORATION
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President-Treasurer
1108440
Signature to the Facility Agreement Letter dated January 8, 2004, between USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust, and USAA Life Investment Trust (not in their individual
capacities, but on behalf of and for the benefit of the series of funds set
forth on SCHEDULE A hereto) and CAPCO.
AGREED AND ACCEPTED
USAA MUTUAL FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA TAX EXEMPT FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
SCHEDULE A TO FACILITY AGREEMENT LETTER
FUNDS FOR WHOSE BENEFIT LOANS CAN BE BORROWED
UNDER FACILITY AGREEMENT LETTER AND BORROWING LIMIT
BORROWER FUNDS MAXIMUM PERCENT OF THE TOTAL ASSETS
WHICH CAN BE BORROWED UNDER
FACILITY AGREEMENT WITH CAPCO
USAA Mutual Fund, Inc. USAA Aggressive Growth 5% of Total Assets
USAA Growth & Income "
USAA Income Stock "
USAA Short-Term Bond "
USAA Money Market "
USAA Growth "
USAA Income "
USAA S&P 500 Index (Member and Reward classes) "
USAA Science & Technology "
USAA First Start Growth "
USAA High Yield Opportunities "
USAA Intermediate-Term Bond "
USAA Small Cap Stock "
USAA Extended Market Index "
USAA Nasdaq-100 Index "
USAA Capital Growth "
USAA Value "
USAA Investment Trust USAA Cornerstone Strategy "
USAA Precious Metals and Minerals "
USAA International "
USAA World Growth "
USAA GNMA Trust "
USAA Treasury Money Market Trust "
USAA Emerging Markets "
USAA Growth and Tax Strategy "
USAA Balanced Strategy "
USAA Tax Exempt Fund, Inc. USAA Long-Term "
USAA Intermediate-Term "
USAA Short-Term "
USAA Tax Exempt Money Market "
USAA California Bond "
USAA California Money Market "
USAA New York Bond "
USAA New York Money Market "
USAA ▇▇▇▇▇▇▇▇ ▇▇▇▇ "
USAA Virginia Money Market "
USAA State Tax-Free Trust USAA Florida Tax-Free Income "
USAA Florida Tax-Free Money Market "
USAA Life Investment Trust USAA Life Income "
USAA Life Growth and Income "
USAA Life World Growth "
USAA Life Diversified Assets "
USAA Life Aggressive Growth "
Schedule A
SCHEDULE B TO FACILITY AGREEMENT LETTER
PERMITTED SUBADVISERS
Batterymarch Financial Management, Inc.
The Boston Company Asset Management, LLC
Dresdner RCM Global Investors LLC
Grantham, Mayo, Van Otterloo & Co. LLC
▇▇▇▇▇▇▇ Capital Management, LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ Quantitative Advisers
MFS Investment Management
Northern Trust Investments, N.A.
Wellington Management Company, LLP
Westwood Management Corporation
Schedule B
EXHIBIT A TO FACILITY AGREEMENT LETTER
MASTER GRID PROMISSORY NOTE
U.S. $400,000,000 Dated: January 08, 2004
FOR VALUE RECEIVED, each of the undersigned (each a "BORROWER" and
collectively the "BORROWERS"), severally and not jointly and not in their
individual capacities, but on behalf of and for the benefit of the series of
funds comprising each such Borrower as listed on SCHEDULE A to the Agreement as
defined below (each a "FUND" and collectively the "FUNDS") promises to pay to
the order of USAA Capital Corporation ("CAPCO") at CAPCO's office located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the
United States of America, in immediately available funds, the principal amount
of all Loans made by CAPCO to such Borrower for the benefit of the applicable
Funds under the Facility Agreement Letter dated January 08, 2004 (as amended or
modified, the "AGREEMENT"), among the Borrowers and CAPCO, together with
interest thereon at the rate or rates set forth in the Agreement. All payments
of interest and principal outstanding shall be made in accordance with the terms
of the Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Agreement. Terms not defined in this Note shall be as set forth
in the Agreement.
CAPCO is authorized to endorse the particulars of each Loan evidenced
hereby on the attached Schedule and to attach additional Schedules as necessary,
provided that the failure of CAPCO to do so or to do so accurately shall not
affect the obligations of any Borrower (or the Fund for whose benefit it is
borrowing) hereunder.
Each Borrower waives all claims to presentment, demand, protest, and
notice of dishonor. Each Borrower agrees to pay all reasonable costs of
collection, including reasonable attorney's fees in connection with the
enforcement of this Note.
CAPCO hereby agrees (i) that any claim, liability, or obligation
arising hereunder or under the Agreement whether on account of the principal of
any Loan, interest thereon, or any other amount due hereunder or thereunder
shall be satisfied only from the assets of the specific Fund for whose benefit a
Loan is borrowed and in any event in an amount not to exceed the outstanding
principal amount of any Loan borrowed for such Fund's benefit, TOGETHER WITH
accrued and unpaid interest due and owing thereon, and such Fund's share of any
other amount due hereunder and under the Agreement (as determined in accordance
with the provisions of the Agreement) and (ii) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Agreement with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Agreement (as determined in accordance with the
provisions of the Agreement).
Neither the shareholders, trustees, officers, employees and other
agents of any Borrower or Fund shall be personally bound by or liable for any
indebtedness, liability or obligation hereunder or under the Note nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
Loans under the Agreement and this Note (except to USAA Life Investment
Trust) are subordinated to loans made under the $100,000,000 Credit Agreement
between the Borrowers and State Street Bank and Trust Company (State Street) and
Bank of America, N.A. (Bank of America), dated January 08, 2004, in the manner
and to the extent set forth in the Agreement among the Borrowers, CAPCO, State
Street and Bank of America, dated January 08, 2004.
This Note shall be governed by the laws of the state of Texas.
Exhibit A
Signature to the Master Grid Promissory Note dated January 08, 2004, by USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust (not in their individual
capacities, but on behalf of and for the benefit of the series of funds set
forth on SCHEDULE A to the Agreement) payable to CAPCO.
USAA MUTUAL FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA TAX EXEMPT FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Exhibit A
SCHEDULE TO NOTE
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 08, 2004, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., USAA STATE TAX-FREE TRUST and
USAA LIFE INVESTMENT TRUST (not in their individual capacity, but on behalf of
and for the benefit of the series of funds comprising each such Borrower)
payable to the order of USAA CAPITAL CORPORATION.
[GRID]
Date of
Loan
Borrower
and Fund
Amount of
Loan
Type of Rate and
Interest
Rate on Date of
Borrowing
Amount of
Principal
Repaid
Date of
Repayment
Other
Expenses
Notation
made by
Exhibit A
EXHIBIT B
EXHIBIT B TO FACILITY AGREEMENT LETTER
BORROWER INFORMATION SHEET
BORROWERS: USAA MUTUAL FUND, INC., USAA INVESTMENT TRUST, USAA
TAX EXEMPT FUND, INC. and USAA STATE TAX-FREE TRUST
ADDRESS FOR NOTICES AND OTHER COMMUNICATIONS TO THESE BORROWERS:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (for Federal Express, 78240)
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President, Fixed Income Investments (USAA)
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Cellphone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
e-mail: ▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Equity Investments (USAA)
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
e-mail: ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Assistant Vice President,
Mutual Fund Accounting and Administration (USAA)
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇▇
Telex: 767424
e-mail: ▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
ADDRESS FOR BORROWING AND PAYMENTS:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (for Federal Express, 78240)
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Assistant Vice President,
Mutual Fund Accounting and Administration (USAA)
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇▇
Telex: 767424
e-mail: ▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Exhibit B
BORROWERS: USAA LIFE INVESTMENT TRUST
ADDRESS FOR NOTICES AND OTHER COMMUICATIONS TO THIS BORROWER:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (for Federal Express, 78240)
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
USAA Investment Management Company
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
e-mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
ADDRESS FOR BORROWING AND PAYMENTS:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (for Federal Express, 78240)
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
USAA Investment Management Company
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
e-mail: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Copies to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Assistant Vice President
Mutual Fund Accounting and Administration (USAA)
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇▇
Telex: 767424
e-mail: ▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
INSTRUCTIONS FOR PAYMENTS TO BORROWER:
WE PAY VIA: X FED FUNDS CHIPS
---------- ----------
Exhibit B
TO: (PLEASE PLACE BANK NAME, CORRESPONDENT NAME (IF APPLICABLE), CHIPS AND/OR
FED FUNDS ACCOUNT NUMBER BELOW)
USAA MUTUAL FUND, INC.
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #▇▇▇▇▇▇▇▇▇
USAA AGGRESSIVE GROWTH FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA GROWTH & INCOME FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA INCOME STOCK FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA SHORT-TERM BOND FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA MONEY MARKET FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA GROWTH FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA INCOME FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA SCIENCE & TECHNOLOGY FUND ACCT.#▇▇▇▇-▇▇▇-▇
USAA FIRST START GROWTH FUND ACCT.#▇▇▇▇-▇▇▇-▇
USAA HIGHYIELD OPPORTUNITIES FUND ACCT.#▇▇▇▇-▇▇▇-▇
USAA INTERMEDIATE-TERM BOND FUND ACCT.#▇▇▇▇-▇▇▇-▇
USAA SMALL CAP STOCK FUND ACCT.#▇▇▇▇-▇▇▇-▇
USAA NASDAQ-100 INDEX FUND ACCT.#▇▇▇▇-▇▇▇-▇
USAA CAPITAL GROWTH FUND ACCT.#▇▇▇▇-▇▇▇-▇
USAA VALUE FUND ACCT.#▇▇▇▇-▇▇▇-▇
NORTHERN TRUST COMPANY, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇ #▇▇▇▇▇▇▇▇▇
▇▇▇▇ S&P 500 INDEX FUND ACCT.#2616882
Exhibit B
▇ ▇ ▇▇▇▇▇▇ CHASE BANK, NEW YORK, NY
ABA #▇▇▇▇▇▇▇▇▇
USAA EXTENDED MARKET INDEX FUND ACCT.#P83544
USAA INVESTMENT TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #▇▇▇▇▇▇▇▇▇
USAA CORNERSTONE STRATEGY FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA PRECIOUS METALS AND MINERALS FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA INTERNATIONAL FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA WORLD GROWTH FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA GNMA TRUST ACCT.# ▇▇▇▇-▇▇▇-▇
USAA TREASURY MONEY MARKET TRUST ACCT.# ▇▇▇▇-▇▇▇-▇
USAA EMERGING MARKETS FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA GROWTH AND TAX STRATEGY FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA BALANCED STRATEGY FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA TAX EXEMPT FUND, INC.
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #▇▇▇▇▇▇▇▇▇
USAA LONG-TERM FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA INTERMEDIATE-TERM FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA SHORT-TERM FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA TAX EXEMPT MONEY MARKET FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA CALIFORNIA BOND FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA CALIFORNIA MONEY MARKET FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA NEW YORK BOND FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA NEW YORK MONEY MARKET FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA ▇▇▇▇▇▇▇▇ ▇▇▇▇ FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA VIRGINIA MONEY MARKET FUND ACCT.# ▇▇▇▇-▇▇▇-▇
Exhibit B
USAA STATE TAX-FREE TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #▇▇▇▇▇▇▇▇▇
USAA FLORIDA TAX-FREE INCOME FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA FLORIDA TAX-FREE MONEY MARKET FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA LIFE INVESTMENT TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #▇▇▇▇▇▇▇▇▇
USAA LIFE INCOME FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA LIFE GROWTH & INCOME FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA LIFE WORLD GROWTH FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA LIFE DIVERSIFIED ASSETS FUND ACCT.# ▇▇▇▇-▇▇▇-▇
USAA LIFE AGGRESSIVE GROWTH FUND ACCT.# ▇▇▇▇-▇▇▇-▇
Exhibit B
EXHIBIT C
ADDRESS FOR USAA CAPITAL CORPORATION
USAA Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit C
EXHIBIT D TO FACILITY AGREEMENT LETTER
OFFICER'S CERTIFICATE
▇▇▇▇ ▇. ▇▇▇▇▇▇ hereby certifies that he is the duly elected Secretary of USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust, and USAA Life Investment Trust (each a "BORROWER" and
collectively the "BORROWERS"), and that he is authorized to execute this
Certificate on behalf of the Borrowers. The undersigned hereby further certifies
to the following:
Any one of the Chairman and Chief Executive Officer of United States Automobile
Association ("USAA"), the Executive Vice President-Chief Financial
Officer/Corporate Treasurer of USAA, or the Senior Vice President-Corporate
Finance and Assistant Treasurer of USAA, together with either the Treasurer or
Assistant Treasurer of the Borrowers, are duly authorized to act on behalf of
the Funds, by transmitting telephonic, electronic mail, telex, or telecopy
instructions and other communications with regard to borrowings and payments
pursuant to the Facility Agreement dated January 8, 2004, with USAA Capital
Corporation. The signature set opposite the name of each individual below is
that individual's genuine signature.
NAME OFFICE SIGNATURE
---- ------ ---------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Chairman and Chief Executive
Officer of USAA __________________________
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. Executive Vice President-Chief
Financial Officer/Corporate
Treasurer of USAA __________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Senior Vice President-Corporate
Finance and Assistant Treasurer
of USAA __________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Treasurer of the Borrowers __________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. Assistant Treasurer of the
Borrowers __________________________
IN WITNESS WHEREOF, I have executed the Certificate as of this 8th day of
January, 2004.
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
I, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, officer of the Borrowers, hereby certify that ▇▇▇▇ ▇.
▇▇▇▇▇▇ is, and has been at all times since a date prior to the date of this
Certificate, the duly elected, qualified, and acting Secretary of the Borrowers
and that his signature set forth above is his true and correct signature.
Date: January 8, 2004
--------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Officer
Exhibit D
MASTER GRID PROMISSORY NOTE
U.S. $400,000,000 Dated: January 08, 2004
FOR VALUE RECEIVED, each of the undersigned (each a "BORROWER" and
collectively the "BORROWERS"), severally and not jointly and not in their
individual capacities, but on behalf of and for the benefit of the series of
funds comprising each such Borrower as listed on SCHEDULE A to the Agreement as
defined below (each a "FUND" and collectively the "FUNDS") promises to pay to
the order of USAA Capital Corporation ("CAPCO") at CAPCO's office located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the
United States of America, in immediately available funds, the principal amount
of all Loans made by CAPCO to such Borrower for the benefit of the applicable
Funds under the Facility Agreement Letter dated January 08, 2004 (as amended or
modified, the "AGREEMENT"), among the Borrowers and CAPCO, together with
interest thereon at the rate or rates set forth in the Agreement. All payments
of interest and principal outstanding shall be made in accordance with the terms
of the Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Agreement. Terms not defined in this Note shall be as set forth
in the Agreement.
CAPCO is authorized to endorse the particulars of each Loan evidenced
hereby on the attached Schedule and to attach additional Schedules as necessary,
provided that the failure of CAPCO to do so or to do so accurately shall not
affect the obligations of any Borrower (or the Fund for whose benefit it is
borrowing) hereunder.
Each Borrower waives all claims to presentment, demand, protest, and
notice of dishonor. Each Borrower agrees to pay all reasonable costs of
collection, including reasonable attorney's fees in connection with the
enforcement of this Note.
CAPCO hereby agrees (i) that any claim, liability, or obligation
arising hereunder or under the Agreement whether on account of the principal of
any Loan, interest thereon, or any other amount due hereunder or thereunder
shall be satisfied only from the assets of the specific Fund for whose benefit a
Loan is borrowed and in any event in an amount not to exceed the outstanding
principal amount of any Loan borrowed for such Fund's benefit, together with
accrued and unpaid interest due and owing thereon, and such Fund's share of any
other amount due hereunder and under the Agreement (as determined in accordance
with the provisions of the Agreement) and (ii) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Agreement with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Agreement (as determined in accordance with the
provisions of the Agreement).
Neither the shareholders, trustees, officers, employees and other
agents of any Borrower or Fund shall be personally bound by or liable for any
indebtedness, liability or obligation hereunder or under the Note nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
Loans under the Agreement and this Note (except to USAA Life Investment
Trust) are subordinated to loans made under the $100,000,000 Credit Agreement
between the Borrowers and State Street Bank and Trust Company (State Street) and
Bank of America, N.A. (Bank of America), dated January 08, 2004, in the manner
and to the extent set forth in the Agreement among the Borrowers, CAPCO, State
Street, and Bank of America, dated January 08, 2004.
This Note shall be governed by the laws of the state of Texas.
Signature to the Master Grid Promissory Note dated January 08, 2004, by USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust (not in their individual
capacities, but on behalf of and for the benefit of the series of funds set
forth on SCHEDULE A TO THE AGREEMENT) payable to CAPCO.
USAA MUTUAL FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA TAX EXEMPT FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 08, 2004, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., USAA STATE TAX-FREE TRUST and
USAA LIFE INVESTMENT TRUST (not in their individual capacity, but on behalf of
and for the benefit of the series of funds comprising each such Borrower)
payable to the order of USAA CAPITAL CORPORATION.
[GRID]
Date of Loan
Borrower
and Fund
Amount
of Fund
Type of Rate
and Interest
Rate of Date of
Borrowing
Amount of
Principle Repaid
Date of Repayment
Other Expenses
Notation
made by
EXHIBIT D TO FACILITY AGREEMENT LETTER
OFFICER'S CERTIFICATE
▇▇▇▇ ▇. ▇▇▇▇▇▇ hereby certifies that he is the duly elected Secretary of USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust, and USAA Life Investment Trust (each a "BORROWER" and
collectively the "BORROWERS"), and that he is authorized to execute this
Certificate on behalf of the Borrowers. The undersigned hereby further certifies
to the following:
Any one of the Chairman and Chief Executive Officer of United States Automobile
Association ("USAA"), the Executive Vice President-Chief Financial
Officer/Corporate Treasurer of USAA, or the Senior Vice President-Corporate
Finance and Assistant Treasurer of USAA, together with either the Treasurer or
Assistant Treasurer of the Borrowers, are duly authorized to act on behalf of
the Funds, by transmitting telephonic, electronic mail, telex, or telecopy
instructions and other communications with regard to borrowings and payments
pursuant to the Facility Agreement dated January 8, 2004, with USAA Capital
Corporation. The signature set opposite the name of each individual below is
that individual's genuine signature.
NAME OFFICE SIGNATURE
---- ------ ---------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Chairman and Chief Executive
Officer of USAA /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. Executive Vice President-Chief
Financial Officer/Corporate
Treasurer of USAA /S/ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Senior Vice President-Corporate
Finance and Assistant Treasurer
of USAA /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Treasurer of the Borrowers /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. Assistant Treasurer of the
Borrowers /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
IN WITNESS WHEREOF, I have executed the Certificate as of this 8th day of
January, 2004.
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
I, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, officer of the Borrowers, hereby certify that ▇▇▇▇ ▇.
▇▇▇▇▇▇ is, and has been at all times since a date prior to the date of this
Certificate, the duly elected, qualified, and acting Secretary of the Borrowers
and that his signature set forth above is his true and correct signature.
Date: January 8, 2004
/S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Officer
Exhibit D
EXHIBIT H(v)
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of May 1, 2003, between USAA LIFE INSURANCE COMPANY, a
corporation organized under the laws of the state of Texas and having a place of
business in San Antonio, Texas ("USAA Life"), and USAA LIFE INVESTMENT TRUST, a
Delaware business trust having a place of business in San Antonio, Texas (the
"Trust").
RECITALS
The Trust is an open-end management investment company registered under the
Investment Company Act of 1940 (the "1940 Act"), as amended, whose shares
("Shares") are registered under the Securities Act of 1933 (the "1933 Act"), as
amended, and with Shares offered in various investment funds as set forth in
Exhibit A (the "Existing Funds") (such funds together with any funds
subsequently established by the Trust for which the Trust desires to retain USAA
Life to provide services under this Agreement, and for which USAA Life is
willing to do so, being collectively referred to as the "Funds").
The Trust makes its shares available for purchase to the Separate Account
of USAA Life Insurance Company and the Life Insurance Separate Account of USAA
Life Insurance Company (the "Separate Accounts"), and may in the future (subject
to any necessary approval by the Board of Trustees) make its shares available to
any other separate accounts of USAA Life or any of USAA Life's subsidiaries or
affiliates, and to separate accounts of non-affiliated life insurance companies
(all such eligible purchasers being referred to collectively as "Purchasers").
USAA Life issues variable annuity contracts and variable life insurance
policies (collectively "Contracts") funded through the Separate Accounts. USAA
Life invests certain assets of the Separate Accounts in the Trust for the
benefit of the owners of the Contracts ("Contract Owners"). USAA Life represents
that the services provided under this Agreement and the fees received hereunder
do not duplicate services provided and fees received under the Contracts or
otherwise in connection with the Separate Accounts.
AGREEMENT
In consideration of the agreements contained herein, and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Trust and
USAA Life agree as follows:
1. APPOINTMENT OF USAA LIFE.
(a) EXISTING FUNDS. The Trust hereby appoints USAA Life to act as
administrator for the Existing Funds for the period and on the terms herein set
forth. USAA Life accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
(b) ADDITIONAL FUNDS. In the event that the Trust desires to retain USAA
Life to render administrative services hereunder with respect to any Fund other
than an Existing Fund, it shall notify USAA Life in writing. If USAA Life is
willing to render such services it shall notify the Trust in writing, whereupon
the Trust shall appoint USAA Life to act as administrator for such Fund for the
period and on the terms herein
1
set forth, and USAA Life shall accept such appointment and agree to render the
services herein set forth for the compensation herein provided.
(c) USAA Life shall be subject to the direction and control of the Trust in
providing services under this Agreement, and shall provide such services in
compliance with all applicable provisions of the Trust's Master Trust Agreement,
Bylaws, Prospectus, and any applicable federal or state laws and regulations.
2. DUTIES OF USAA LIFE.
USAA Life shall administer the affairs of the Trust and provide related
services required for the operation of the Funds; provided, that USAA Life shall
not have any obligation to provide under this Agreement any services related to
the distribution of Fund shares or any other services which are the subject of a
separate agreement or arrangement between the Trust and USAA Life or its
affiliates with respect to the Funds. Subject to the foregoing, USAA Life shall
provide the following services and facilities to the Trust:
(a) OFFICE SPACE, EQUIPMENT AND FACILITIES. Furnish such office space,
office equipment, and office facilities as are adequate for the Trust's needs
with respect to the Funds.
(b) PERSONNEL. Provide the services of individuals competent to perform all
of the Trust's executive, administrative, and clerical functions that are not
performed by employees or other agents engaged by the Trust or by USAA Life
acting in some other capacity pursuant to a separate agreement or arrangement
with the Trust with respect to the Funds.
(c) AGENTS. Assist the Trust in selecting and coordinating the activities
of the other agents engaged by the Trust with respect to the Funds, including
the Trust's transfer agent, custodian, independent auditors, and legal counsel.
(d) TRUSTEES AND OFFICERS. Authorize and permit USAA Life's directors,
officers and employees who may be elected or appointed as trustees or officers
of the Trust to serve in such capacities, without remuneration from or other
cost to the Trust.
(e) BOOKS AND RECORDS. Assure that all financial, accounting and other
records required to be prepared, maintained, and preserved by the Trust with
respect to the Funds are prepared, maintained, and preserved by it or on its
behalf in accordance with applicable laws and regulations.
(f) REGULATORY REPORTS AND FILINGS. Prepare and file (as required) or
arrange for others to prepare and file, but not pay for, all tax returns with
respect to the Trust, all proxy statements with respect to the Funds, all
periodic reports by the Trust with respect to the Funds, and all reports and
filings required to maintain the registration and qualification of the Trust and
the Shares, or to meet other regulatory or tax requirements applicable to the
Funds under federal and state securities and tax laws.
(g) BOARD REPORTS. Prepare and coordinate materials relating to the Funds
to be presented to the Trust's Board of Trustees in preparation for its
meetings.
(h) FIDELITY BOND. Provide and maintain a bond issued by a reputable
insurance company authorized to do business in the place where the bond is
issued, against larceny and embezzlement covering each officer and employee of
the Trust who may singly or jointly with others have access to funds or
securities of the Trust, with direct or indirect authority to draw upon such
funds or to direct generally the disposition of such funds. The bond shall be in
such reasonable amount as a majority of the Board of Trustees of the Trust
2
who are not officers or employees of the Trust shall determine, with due
consideration to the aggregate assets of the Trust to which any such officer or
employee may have access.
(i) CALCULATION OF NET ASSET VALUE. Compute each Fund's net asset value per
Share.
(j) DELEGATION. Delegate, at its expense, some or all of its duties
hereunder to other persons or entities approved by USAA Life upon prior notice
to the Trust.
(k) OTHER SERVICES. Provide such other services as the parties may from
time to time agree in writing.
3. DUTIES OF THE TRUST.
Provide or cause others to provide to USAA Life all financial or other
information necessary to USAA Life's providing services under this Agreement.
4. ALLOCATION OF EXPENSES.
Except for the services and facilities to be provided by USAA Life set
forth in paragraph 2 above and except for the services provided by USAA Life set
forth in any other Agreement between the Trust and USAA Life, the Trust assumes
and shall pay all expenses for all other Fund operations and activities and
shall reimburse USAA Life for any such expenses incurred by USAA Life. The
expenses to be borne by the Trust shall include, without limitation:
(a) the charges and expenses of any registrar, share transfer or dividend
disbursing agent, custodian, or depository appointed by the Trust for the
safekeeping of a Fund's cash, portfolio securities and other property;
(b) the charges and expenses of independent auditors;
(c) brokerage commissions, if any, for transactions in the portfolio
securities of the Funds;
(d) all taxes, including issuance and transfer taxes, and fees payable by a
Fund to federal, state or other governmental agencies;
(e) the cost of any share certificates representing Shares of a Fund;
(f) fees involved in registering and maintaining registrations of the Trust
and of its Shares with the applicable federal, state, and other jurisdictions;
(g) all expenses of shareholders' and Trustees' meetings and of preparing,
printing and mailing proxy statements, any quarterly reports, semiannual
reports, annual reports and other communications (including prospectuses) to
existing shareholders and Contract Owners;
(h) compensation and travel expenses of Trustees who are not "interested
persons" of the Trust within the meaning of the 1940 Act;
(i) charges and expenses of legal counsel in connection with matters
relating to the Funds, including, without limitation, legal services rendered in
connection with the Funds' legal and financial structure
3
and relations with its shareholders and Contract Owners, issuance of Fund
Shares, and registration and qualification of securities under federal, state
and other laws;
(j) membership or association dues for the Investment Company Institute or
similar organizations;
(k) interest payable on Fund borrowings; and
(l) postage.
5. ADMINISTRATION FEE.
(a) For the services and facilities to be provided by USAA Life as provided
in paragraph 2 hereof, the Trust shall reimburse USAA Life, on a monthly basis
in arrears, for the cost of providing the services under this Agreement;
provided, however, that such reimbursement shall be subject to the Maximum
Expense with respect to each Fund, as set forth in EXHIBIT A hereto.
(b) USAA Life may, from time to time, and for such periods as it deems
appropriate, voluntarily waive fees or otherwise reduce its compensation
hereunder.
6. LIABILITY AND INDEMNIFICATION.
(a) USAA LIFE. USAA Life shall exercise reasonable care in performing its
services under this Agreement. USAA Life shall indemnify and hold the Trust, and
its trustees, officers, and employees harmless from and against any and all
loss, cost, damage and expense (a "Loss"), including reasonable expenses for
counsel, incurred by it resulting from any claim, demand, action or suit
relating to the performance of its duties under this Agreement, or any action or
omission by it in the performance of its duties hereunder; PROVIDED, HOWEVER,
that this indemnification shall not apply to any Loss resulting from any action
or inaction of the Trust constituting willful misconduct, bad faith or
negligence in the performance of its duties or the reckless disregard of its
duties under this Agreement.. Prior to confessing any claim against it, which
may be the subject of this indemnification, the Trust shall give USAA Life
reasonable opportunity to defend against such claim in its own name or in the
name of the Trust.
(b) TRUST. The Trust shall indemnify and hold USAA Life and its officers,
directors and employees harmless from and against any and all loss, cost, damage
and expense (a "Loss"), including reasonable expenses for counsel, incurred by
it resulting from any claim, demand, action or suit relating to the performance
of its duties under this Agreement, or any action or omission by it in the
performance of its duties hereunder; PROVIDED, HOWEVER, that this
indemnification shall not apply to any Loss resulting from any action or
inaction of USAA Life constituting willful misconduct, bad faith or negligence
in the performance of its duties or the reckless disregard of its duties under
this Agreement. Prior to confessing any claim against it which may be the
subject of this indemnification, USAA Life shall give the Trust reasonable
opportunity to defend against such claim in its own name or in the name of USAA
Life.
7. CONFIDENTIALITY.
(a) Trust records maintained by USAA Life under this Agreement shall be and
remain the property of the Trust. USAA Life shall promptly surrender or make
such records available to the Trust or its designee, without charge, except for
reimbursement of expenses for the surrender of such documents, upon request by
the Trust or upon termination of this Agreement.
4
(b) USAA Life shall not disclose or use any records or information obtained
hereunder in any manner whatsoever except as expressly authorized hereunder, and
further, shall keep confidential any information obtained pursuant to this
Agreement with the Trust as set forth herein, and disclose such information only
if the Trust has authorized such disclosure, or if such disclosure is expressly
required by applicable federal or state regulatory authorities.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) DURATION. This Agreement shall become effective as of the date first
set forth above and, unless terminated, shall continue in force from year to
year thereafter, but only so long as such continuance is specifically approved
annually (a) by the Trust's Board of Trustees or by a vote of a majority of the
Funds' outstanding voting securities (as that term is defined in the ▇▇▇▇ ▇▇▇)
and (b) by a majority of the Trustees who are not parties to this Agreement or
"interested persons" of any such party (as defined in the 1940 Act.)
(b) TERMINATION. This Agreement may be terminated at any time, without
payment of any penalty, by vote of the Board of Trustees of the Trust or by vote
of a majority of the outstanding shares (as defined in the 1940 Act), or by USAA
Life on 60 days' written notice to the other party, subject to subparagraph (c)
below with respect to Maximum Expenses. This Agreement shall automatically
terminate upon its assignment by USAA Life; PROVIDED, HOWEVER, that USAA Life
may delegate its duties as provided in subparagraph (j) of paragraph 2 hereof.
(c) AMENDMENT. This agreement may be amended at any time by mutual
agreement in writing of the parties hereto, provided that any such amendment is
approved by a majority of the Trustees of the Trust who are not interested
persons. Notwithstanding the foregoing, no change (including termination of this
Agreement) to the Maximum Expenses set forth in Exhibit A shall take effect
until the then current Maximum Expense has been in effect for at least one year
and the Trust has received advance notice as required by subparagraph (b) above.
9. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject
matter hereof between the parties.
10. SERVICES NOT EXCLUSIVE.
The services of USAA Life to the Trust hereunder are not to be deemed
exclusive, and USAA Life shall be free to render similar services to others so
long as its services hereunder are not impaired thereby.
11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Texas and the applicable provisions of the 1940 Act. To the extent the
applicable law of the State of Texas, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
12. ENTIRE AGREEMENT.
This is the complete and entire agreement as represented herein.
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
USAA LIFE INVESTMENT TRUST USAA LIFE INSURANCE COMPANY
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------- ---------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President Title: President
6
EXHIBIT A
LISTING OF FUNDS AND MAXIMUM EXPENSES
NAME OF FUND MAXIMUM EXPENSE
USAA Life Growth & Income 0.60%
USAA Life Aggressive Growth 0.95%
USAA Life World Growth 0.95%
USAA Life Diversified Assets 0.75%
USAA Life Income 0.65%
(a) For purposes of this Agreement, Maximum Expense is based on
the total Fund expenses for all Fund operations and
activities, including but not limited to the expenses
allocated to the Trust under section 4 of this Agreement,
investment advisory expenses, and the cost of administrative
services provided under this Agreement. Maximum Expense is
computed as a percentage of the average net assets of the Fund
for each month at the rate set forth in this Exhibit.
(b) The schedule of Maximum Expenses as set forth herein shall
remain in full force and effect for the life of this
Agreement.
(c) The "average net assets" of the Fund for any month shall be
equal to the quotient produced by dividing (i) the sum of the
net assets of such Fund, determined in accordance with
procedures established from time to time by or under the
direction of the Board of Trustees of the Trust, for each
calendar day of such month, by (ii) the number of such days.
7